All posts tagged Business Development Bank of Canada

One of the cylinders in Canada’s economic engine isn’t firing at full blast – and it needs help.

Some 17% of Canada’s mid-sized companies–those with between 100 and 499 employees–vanished from 2006 to 2010, according to a new study by the Business Development Bank of Canada, a federal government-owned lender to small and medium-sized firms.

Bloomberg

Manufacturing was hardest hit, with half of that sector’s mid-sized firms disappearing. The province of Ontario, Canada’s manufacturing heartland and home to over a third of the country’s mid-sized firms, saw 25% of its mid-sized companies disappear.

The rise of China, a steep rise in the Canadian dollar, the global credit crunch and the recession have all taken their toll, the BDC said.

He drew a comparison to Germany, where the dynamic mid-sized company sector, or “Mittelstand,” has been a large part of that country’s economic success. Many of Germany’s Mittelstand firms are recognized as world leaders in their niche.

In Canada, these companies fly under the radar, representing less than 1% of corporate Canada. Still, they punch above their weight, accounting for 16% of all jobs, 12% of Canada’s gross domestic product and 17% of the value of exports, according to the report.

They’re facing much stronger competition, can’t access funding and have difficulty finding skilled workers, the report said, based on the findings of a survey of 300 executives conducted last fall. Read More »

Canada should clamp down on three state-owned financial firms that have expanded far beyond their original mandates before they expose taxpayers and the economy to undue risk, a prominent Canadian think-tank said.

Associated Press

The C.D. Howe Institute, in a report released Wednesday, highlighted its concerns with Farm Credit Canada, the Business Development Bank of Canada and the Export Development Canada. All three government-owned firms—known as Crown corporations in Canada– operate beyond their original mandates of filling the perceived market gap of providing credit for some consumers and businesses, the co-authors said in their analysis.

The three entities crowd out private-sector players, “increase financial risk, potentially in a systemic manner, and they expose taxpayers to larger risks than they would otherwise face,” the report said. Their activities pose “risks to the overall economy – and these risks seem to have grown rather than shrunk in recent years,” it said.

Spokespeople at the three entities weren’t immediately available to comment.

Their “mandates should be clearly circumscribed, and even rolled back,” said the report’s co-author, Philippe Bergevin. Read More »

About Canada Real Time

Canada Real Time provides insight and analysis into what’s making news in Canada, a country punching above its weight on the world stage thanks to its vast resources and strong banking sector. Drawing on the expertise of The Wall Street Journal and Dow Jones Newswires, we take a look at developments in fields ranging from business to politics to culture. You can contact the editors at canadaeditors@dowjones.com